In the world of retail, one thing is certain: fashion brands, especially wholesale retailers, will have to deal with excess inventory. This is true after the end of a hectic season just as much as it’s true during slower sales months.
Why does the retail industry have an inventory problem, exactly? There are a number of reasons, but two make managing overstock more difficult. First, retailers basically have to predict what their customers will want to buy from them in the future. Because no one is a mind-reader, you’re going to get it wrong every now and then and be stuck with merchandise that isn’t selling. Second, most fashion products become outdated in less than six months, which poses a huge problem for your inventory.
With that said, it’s important to anticipate and prepare for excess inventory, but you don’t have to accept losing money that’s tied up in dead stock. There are ways to manage your inventory to help prevent significant overstock and profit loss. Here are a few tips.
Manage your expectations
Fashion brands don’t have a crystal ball to predict what products consumers will flock to in six months. They also can’t foresee crises before they happen, like the complete upheaval caused by the recent coronavirus pandemic. These moments demonstrate why it’s important for brands to manage their expectations while looking for ways to leverage their excess inventory when it inevitably happens. In some instances, brands must liquidate their extra products to help pay for things like rent and future collections. Or there are other options, like marking down products and offering sales or bundling older products with new products at a discounted rate.
Reimagine the shopping experience
Consumers have always enjoyed the perks of being able to shop in-store and online, but COVID-19 has more people rethinking how they shop. Now, more consumers report wanting to avoid brick-and-mortar stores and buy online. With an influx of online shoppers browsing the internet for items, brands must be able to provide them with a better shopping experience to stand out from the competition. One way to enhance your online store is by creating a virtual showroom, which I wrote about in an earlier blog. Virtual showroom technologies play a critical role in inventory management because it helps showcase all of your products and increase sales.
Get support for inventory management
Running a retail business is difficult, but you don’t have to do it all on your own. Software like ApparelMagic can help take the time and guesswork out of inventory management. This not only simplifies the process, but inventory management software is also more accurate and helps brands respond more quickly to trends and other changes in market conditions. Smart stock allocation strategies help brands avoid stocking up on excess inventory at their brick and mortar stores and online so they aren’t grappling with overstock every season.
Having tactics in place to help diminish excess inventory sets your brand up for success.